Firms fined $350,000 after yogurt sting uncovers review rigging

A year-long investigation by New York prosecutors has found 19 local businesses guilty of faking reviews on sites such as Google and Yelp, a practice that has now earned them over $350,000 in fines and penalties.

As part of "Operation Clean Turf," investigators from the office of the New York Attorney General posed as yogurt shop owners from Brooklyn, and asked leading search engine optimization (SEO) companies for help in improving their presence online.

Not surprisingly, they uncovered a variety of dodgy goings-on. These included SEO firms promising to put up favorable reviews written by freelancers (including from freelancers in the Philippines, Bangladesh, and Eastern Europe), giving reviewers free gifts which they did not disclose, or just SEOers writing their own reviews and using IP masking to avoid being linked to them.

"This investigation into large-scale, intentional deceit across the Internet tells us that we should approach online reviews with caution," said New York's Attorney General Eric Schneiderman. "Companies that continue to engage in these practices should take note: 'Astroturfing' is the 21st century's version of false advertising, and prosecutors have many tools at their disposal to put an end to it."

In addition to dodgy SEO companies, the investigators found evidence that some companies were cutting out the middleman and doing their own reviews, or putting adverts on Craigslist and Freelancer.com to hire friendly write-up merchants. The Scores ... ahem ... "gentlemen's club" was named as posting 175 fake reviews for its performers via a freelance writer.

One of the top targets for the fakers was Yelp, and writers were sought who had active accounts of good standing so that the reviews wouldn't be spotted as spam. Yelp said that it welcomed the news of the fines.

"We applaud NY Attorney General Schneiderman for his willingness to tackle the issue of illegal fake reviews head on, and for his success in shutting down these operators," said Aaron Schur, Yelp's litigation counsel.

"We look forward to continuing to cooperate with the New York Attorney General's office and any other interested law enforcement office or regulator to protect consumers and business owners from efforts to mislead."

While most of the businesses fingered in the sting are small concerns, a recent report from Gartner predicts that at least two Fortune 500 companies will face litigation over the use of fake reviews in the next year or so. The analyst house forecast that by 2014 between 10 and 15 per cent of reviews on sites like Yelp will be corporate-sponsored fakes and warned of a coming crackdown by regulators.

"Marketing, customer service and IT social media managers looking to use reviews, fans and 'likes' to improve their brand's reputation on social media must beware of the potential negative consequences on corporate reputation and profitability," said Ed Thompson, vice president and distinguished analyst at Gartner.

"CMOs will need to weigh the longer-term risks of being caught and the associated fines and damage to reputation and balance them against the short-term potential rewards of increased business and the prevailing common business practice in their market, often regardless of ethics." ®